Linc Energy Spends US$50 Million On Undeveloped Alaskan Oil Asset

Linc Energy Ltd. (LNC.AU) has paid US$50 million for a controlling stake in an undeveloped Alaskan oil field as it continues to build up its American oil interests.

Linc said it has agreed to acquire 85% of Renaissance Umiat LLC, which it said owns a 100% working interest and 80% net revenue interest in the Umiat project in Alaska's National Petroleum Reserve.

Construction of a road to the field connecting it to the Dalton Highway by the state of Alaska could commence in the next 12-24 months and take about 18 months to complete, Linc said.

"The public commitment by the state of Alaska to develop this infrastructure was a significant factor in the decision by Linc Energy to pursue this Alaskan development opportunity," the company said.

Linc intends to build a pipeline from the field about 80 miles west to the Trans-Alaska Pipeline System. Previous cost estimates for pipeline construction are about US$207 million, it said.

During road and pipeline development, Linc said it intends to conduct further exploration drilling, resource delineation and development of the field.

It will fly a drill rig into the Umiat airstrip "as soon as practically possible".

The 80% net revenue interest in the acquired leases is currently attributed to net probable and possible reserves of 201 million barrels of oil, Linc said.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]